NOIDA Sports City | Builder Consortium Did Nothing To Develop Sports Facilities, Only Interested In Secondary Residential Areas: Allahabad HC

The Allahabad High Court has recently observed that the members of the consortium of builders who were responsible for the development of NOIDA Sports City were only interest in development of the residential areas rather than developing the sports facilities which was the primary object of the development plan.

While hearing a plea by M/s Xanadu Estates Private Limited which among various reliefs sought restructuring of repayment schedule as well as extension of benefit of the Zero period without any payment of the extension fees/charges, the lead member of the Consortium, the bench of Justice Mahesh Chandra Tripathi and Justice Prashant Kumar observed that

“The consortium members/allottee of the Sport City project miserably failed to develop the sports facilities in the area allotted to them, infact, nothing has been done towards development of sports facilities and neither the outstanding dues of the Noida Authority was paid nor the additional compensation of the farmers and the other dues were paid. The members of the consortium were only interested in developing the residential sector, which was secondary part of the project. None of the members were interested in developing sports city, which was the primary part of the project.”

The court further held that since the petitioner, which was the lead member of the consortium, had chosen  to opt out of the Sport City project soon after the project allotment, it therefore has no does not have any locus to file the writ petition seeking the reliefs. 

"It has no involvement in the project and holds no stake or interest in the development of the Sports City. Additionally, its rights have not been adversely impacted by the inaction of the Noida Authority. Therefore, the petitioner does not have any locus to file the instant writ petition seeking the reliefs mentioned therein...The petitioner company could not demonstrate as to how and in what manner its rights are affected and therefore, no relief can be granted to the petitioner in the instant writ petition," the court added. 

Background

NOIDA launched a scheme for development of Sports City in Sector Nos. 78, 79, and 150 in 2011. The reserve price for the scheme was set at Rs.11,500/- per square metre with the intention for development of sports facilities over 70% of the entire land allotted to the developer by the developer. One of the conditions was that the developer had to infuse his funds to develop the same. Out of the 30% land on which construction was allowed, 28% was to be developed for Group Housing and 2% for commercial purpose.

The entire project was for an area of 7,27,500 sqm., out of which 5,92,300 sqm. land was immediately allotted to the Consortium lead by M/s. Xanadu Estates Private Limited, petitioner on 04.05.2011. An application by the petitioner to sub-divide the land was approved by NOIDA.

Though separate sub-leases were executed between NOIDA and sub-lessees, the condition of the lease deed that 30% of share in the consortium shall be with the lead member till the temporary occupancy or completion certificate of at least first phase is granted to the lessors, was also incorporated.

Since certain portion of the allotment was not handed over to the petitioner, it asked NOIDA to give it benefit of the zero period. Subsequently, adjacent land was provided, and at this stage 80% of the area allotment was received. A master plan by the developers was approved by NOIDA in 2014. The benefit of zero period was granted to the allottees till 2017. Due to subsequent changes in the plan, the period for payment was shifted to be effect from 31.07.2017 to 31-01- 2025. For context, Zero period exempts the builders from the land allotment charges and the penal interest to reduce their financial burden.

Noida Authority in its 177th meeting of the Board held on 27.05.2013 resolved that the balance land of which possession could not be given in lieu thereof, 48,520 square meters of land of the adjacent sectors may be allotted to the allottee. Thereafter, 48,520 square meters of land in the adjacent Sector 101 was allotted and a notice for allotting the same was also issued to the allottees on 21.06.2013. With this allotment 80 per cent of the area offered in the sports city project has been achieved with the effect that the minimum requirement for project was achieved.

The allottees/SPC collectively applied for the approval of a master layout plan for the development of the sports city in Sectors 78 and 79. The plan was approved on June 16, 2014. However, the Noida Authority vide its letter dated 30.12.2016 granted benefit of Zero period upto 31.01.2017 for an area of 3,24,729.30 square metres. While granting the benefits, the Noida Authority made it clear that no further benefit would be accorded to the allottees. The Noida Authority further issued a revised payment plan for the plot allotted to the sub-lessee. The effect of the shifting was that the date of making payment of the dues were shifted and the payment schedule started w.e.f. 31.07.2017 to 31-01- 2025.

Due to agitation by the farmers, the possession of adjacent land could not be handed over to the petitioner. Thereafter, petitioner submitted a revised master plan which is still pending with NOIDA. Meanwhile, in view of reports of a scam in the development of sports city, the matter was referred to Controller and Auditor General of India for audit, wherein it was found that “various irregularities in the allotment and development of the Sports City, which resulted in a loss of almost Rs.9000/- crores to the State Exchequer.” As per the brochure only residential and commercial plots could have been divided but the Noida Authority sub-divided entire plots, which were earmarked for Sports City as well. Bids of the allottees were not screened and the turnover of the candidates were also not considered before allotting the plot. 

Petitioner, lead member, having the highest share in the project was ousted from the project and NOIDA reallotted plots to certain other allotees which were not entitled for allotment.

As a reaction to this, NOIDA convened a meeting, froze all activities in the Sports city and turned to State Government for guidance and directions. Petitioner moved representations for approval of revised Master Plan and for grant of benefit of zero period, on which no action was taken. Accordingly, petitioner approached the writ Court.

Among various reliefs the petitioner company sought a direction to NOIDA authority to extend the period of construction and completion of the Project by equivalent period of such Zero Period without any payment of the extension fees/charges in respect of the development of recreational/ residential/ commercial area on the Subject Land till date of grant of actual & complete physical possession of the land. 

It also sought a direction to the authorities not to levy or collect any lease rent and interest on lease premium from the date of the lease/ allotment on account of grant of Zero Period approval till the date of grant of actual & complete physical possession of the land. It further sought a direction to the respondents to provide to the Petitioner, a restructuring of the repayment schedule. 

Findings

The Court observed that “NOIDA having been declared to be an Industrial Township is obligated to, not only develop industries but also to develop a complete township by virtue of Article 243Q of the Constitution of India.” Accordingly, the Sports City Scheme was to further this object, held the Court.

The Court noted that though it was mandatory under the lease deed and sub-lease deeds that the lead member's (of the Consortium) shareholding be atleast 30% till temporary occupation certificate was granted for the first phase, however, its shareholding was reduced to zero soon after the allotment.

Noting that the Consortium had not objected to NOIDA's letter stating that no further zero period will be granted, the Court held that the Consortium had failed to develop the sports facilities which was the primary object of the Sports City development plan.

Further, the Court held that petitioner failed to show any substantial reason for grant of benefit of zero period as “On one hand, the petitioner seeks the benefit of the Zero period claiming that they do not have possession, and on the other hand, consortium members were engaged in constructing residential apartments and collecting money from home buyers, continuing with the ancillary project.”

It held that once the petitioner was opted out of the scheme, it had no right for grant of any benefits relating to the scheme.

Regarding the rescheduling of outstanding payments , the Court held that NOIDA had been unduly granting benefits to the allotees when there was no need for the same.

“The officers of the Noida Authority have failed to take any serious steps to collect the outstanding dues against the allottees. While a few notices may have been sent to the allottees as a formality, no genuine efforts have been made to recover the dues.”

Holding the sub-allotees entirely responsible for delay in payment/ development, the Court denied issuance of writ for restructuring of payments.

Accordingly, the writ petition was dismissed.

Case Title: M/s Xanadu Estates Private Limited vs. State of U.P. and 2 Others 2025 LiveLaw (AB) 74 [WRIT - C No. - 26640 of 2021]

Case Citation: 2025 LiveLaw (AB) 74

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